Novanta (NASDAQ:NOVT – Get Free Report) and Neonode (NASDAQ:NEON – Get Free Report) are both technology companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, dividends, analyst recommendations, valuation and risk.
Profitability
This table compares Novanta and Neonode’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Novanta | 6.00% | 10.83% | 7.53% |
| Neonode | 397.84% | -32.35% | -28.42% |
Analyst Ratings
This is a summary of current recommendations and price targets for Novanta and Neonode, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Novanta | 0 | 1 | 1 | 1 | 3.00 |
| Neonode | 1 | 0 | 0 | 0 | 1.00 |
Insider and Institutional Ownership
98.3% of Novanta shares are held by institutional investors. Comparatively, 11.6% of Neonode shares are held by institutional investors. 1.2% of Novanta shares are held by insiders. Comparatively, 21.9% of Neonode shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Volatility & Risk
Novanta has a beta of 1.67, indicating that its stock price is 67% more volatile than the S&P 500. Comparatively, Neonode has a beta of 1.12, indicating that its stock price is 12% more volatile than the S&P 500.
Valuation and Earnings
This table compares Novanta and Neonode”s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Novanta | $980.60 million | 5.40 | $53.83 million | $1.56 | 89.78 |
| Neonode | $2.06 million | 6.78 | $8.49 million | ($0.33) | -2.52 |
Novanta has higher revenue and earnings than Neonode. Neonode is trading at a lower price-to-earnings ratio than Novanta, indicating that it is currently the more affordable of the two stocks.
Summary
Novanta beats Neonode on 12 of the 15 factors compared between the two stocks.
About Novanta
Novanta, Inc. engages in the provision of core technology solutions to healthcare and advanced industrial original equipment manufacturers. It operates through the following segments: Photonics, Vision, and Precision Motion. The Photonics segment designs, manufactures, and markets photonics-based solutions, including laser scanning and laser beam delivery, CO2 laser, continuous wave and ultrafast laser, and optical light engine products. The Vision segment offers a range of medical grade technologies, including medical insufflators, pumps and related disposables, surgical displays and operating room integration technologies, optical data collection and machine vision technologies, radio frequency identification technologies, thermal printers, spectrometry technologies, and embedded touch screen solutions. The Precision Motion segment includes optical encoders, precision motor and motion control technology, air bearing spindles, and precision machined components to customers. The company was founded in 1968 and is headquartered in Bedford, MA.
About Neonode
Neonode Inc., together with its subsidiaries, develops optical sensing solutions for contactless touch, touch, and gesture sensing in the United States, Japan, South Korea, Germany, Switzerland, France, Sweden, China, and internationally. It also offers software solutions for machine perception to detect and track persons and objects in video streams from cameras and other types of imagers. In addition, the company sells touch sensor modules to OEMs, original design manufacturers, and systems integrators. Further, it licenses its zForce technology to original equipment manufacturers and automotive Tier 1 suppliers, as well as provides non-recurring engineering services related to application development. It serves office equipment, automotive, industrial automation, medical, military, and avionics markets. Neonode Inc. was incorporated in 1997 and is headquartered in Stockholm, Sweden.
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